Envelop VR Raises $4M in Seattle’s Revved Up Immersive Tech Cluster

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Imagine donning a headset that transforms your office from a drab cubicle to a mountain top, with virtual screens floating all around you. You can move them into view with a click, or eventually a gesture. Or you can just turn your head. You can invite in colleagues on another floor or another continent. You can click a link and populate your virtual work room with the latest 3D rendering of your current project. This new workspace is immersive, surprisingly calm, and much closer to reality than you might think.

Envelop VR, a Bellevue, WA-based startup building software to enable this kind of virtual reality workspace—along with the countless other applications atop what company co-founder and CEO Bob Berry calls a “fundamentally transformative platform”—is in the vanguard of a growing Seattle-area virtual reality cluster.

Some 38 companies exhibited and 800 people registered to attend the second annual SEA VR conference in Bellevue Wednesday, where Envelop announced a $4 million Series A investment led by Madrona Venture Group.

It was easy to get swept up in the enthusiasm for this kind of technology, which, if it unfolds as proponents are predicting, will indeed be transformative, and not just in terms of how we interact with technology.

“I believe in my heart that these technologies are going to raise the consciousness of humanity, and the intelligence, overall, of our species,” Berry said, opening the conference, which drew 300 attendees last year. “This is a big deal.” [Berry joins other Seattle-area VR entrepreneurs from VRstudios and Pluto VR on Friday at Seattle 2035, Xconomy’s conference on the future of our region’s innovation economy. Check out the full agenda and register here.]

Berry

At first glance, it might be easy to dismiss VR as something just for entertainment, another extension of the world of video games to get lost in. And there were plenty of first-person shooters and racing games on display at SEA VR. But that would be a mistake says Philip Rosedale, founder of online virtual world Second Life, and more recently, High Fidelity, a San Francisco startup working on software to allow people to create their own virtual worlds.

“To say that VR is a kind of a gaming peripheral is a little bit like saying that a smartphone was a thing to make calls with, or that the Internet was the best way to get news,” Rosedale tells the SEA VR audience.

VR is “the next disruptor,” he continues, and it’s on the scale of smartphones and the Internet—which were disruptive not because of their impact as technologies or utilities, but because of their impact on communications. “It’s profound.”

Rosedale, Berry, and others at the event Wednesday made a point of explaining why they believe the VR of today is not the VR of the 1990s, or even of 10 years ago. (Berry studied virtual reality at Gifu University in Japan in the late 1990s, but became disillusioned with the technology—“All we could do was make you sick at different speeds,” he says—and went back to making video games, until recently.)

First, it’s the hardware, which is not just better than a generation ago, it’s also becoming significantly cheaper. “The difference today is cost,” Rosedale says. “Disruptive revolutions happen because some sort of new technology becomes available to everyone broadly. The smartphone was cheap enough for everybody to get it. In fact, the vigorous competition in the smartphone industry is what drove down the cost of the same equipment that we are going to enjoy the fruits of with VR.”

Google Cardboard

VR headsets from Oculus (the company Facebook acquired for $2 billion), HTC, and Sony are expected to reach the market in the next eight months—and those are just three prominent devices in a growing hardware landscape. Some 1.3 million Google Cardboards—admittedly in a different class than these others in that Cardboard is, well, cardboard, and requires a smartphone—are going out to New York Times subscribers early next month.

“If everybody can have access to this kind of equipment, we do have the potential to have a revolution,” Rosedale says.

Rosedale.

But there’s more to the VR equation than just accessible hardware.

“I think now we can start doing meaningful software work in virtual reality,” Berry says. “It came about as a culmination of these technologies maturing right around the same time, and you put them together in just the right way, and we can deliver what we call ‘presence’—a sense of actually being somewhere else.”

Nascent VR businesses need look no further than the Seattle area, which is “poised to be a hotbed” of immersive technologies, Berry says. He cites top-tier institutions, such as the University of Washington and DigiPen Institute of Technology teaching the skills needed in this new industry; more than 300 local video game companies, including Bellevue, WA-based Valve, which is making SteamVR software for the HTC Vive, and Microsoft with its forthcoming augmented-reality HoloLens; a range of established corporations in retail and other fields with a willingness to experiment; and a growing cluster of VR-focused startups working on many facets of the technology.

Another ingredient is capital. The Madrona investment in Envelop is the 20-year-old venture firm’s first bet in the sector. Envelop, founded in 2014, raised a $2 million seed round in June from several well-known angel investors, including Rudy Gadre, Howard Morgan, Hank Vigil, and Geoff Entress (who is moderating the VR panel discussion at Seattle 2035).

“Finally, the investment community is starting to heat up in this area,” Berry says. “You put all of those things together and it almost just seems like a no-brainer. It’s happening. And it’s going to happen in a big way here in our backyard.”

So what does Envelop do?

To find out, I sit down with co-founder and CTO Jon Mavor for one of the first public demonstrations of the Envelop Virtual Environment, or EVE. The software is … Next Page »